Posts Tagged ‘Startups’

I read Jazzy Chad’s emotional and brutal ‘Startups are hard post‘ and wanted to add my own comments. I don’t know Chad but in my opinion he’s being very hard on himself. His lack of reaching his goals and achievements seems to be tearing him apart and making him frustrated and bitter. Yes I agree startups are damn hard, but they are also rewarding, fun and fulfilling. Let us not forget this.

I’ve drawn out and condensed some of Chad’s text and added my comments. I thank Chad for his passion, honesty and putting this in the open.

Startups are hard. No, startups are damn hard.

“Startups that die rarely talk about it publicly because it is frustrating, embarrassing, and most of the time the people involved want to forget the whole mess and move on rather than sit around talking about the fact that they failed.

Most people don’t want to admit that startups are hard, either, because to admit something is hard is to admit that you don’t know everything there is to know about a certain topic and to display weakness.”

My co-founder and I spent seven months and a pile of cash building something that went nowhere. It took us time to get over it but we did. There were lessons to be learnt from this experience, they just take time before you see all the dots join.

You’re Nobody Till Somebody Loves You

“In the Valley, you are a Nobody until you are a Somebody. Trying to launch a new product as a Nobody is hard. Trying to get press as a Nobody is very hard because nobody knows who you are and so they don’t care about your product.

Raising money as a Nobody isn’t just hard, it is nearly impossible. There are a few major factors that investors look at when making an investment decision. Two big factors are Traction and Revenue.”

We’re not in the valley, so I can’t comment on this location, but I know nobody is listening to us where we are! In my mind the only people that real love comes from is your customers. We prefer to focus on them.

“Jealousy… is a mental cancer.” -B.C. Forbes

“Am I jealous of other companies’ success? I would be lying if I said no. I am slightly jealous when I wake up and read another story about some company raising a million dollars for some idea that makes absolutely no sense to me, or seeing an acquisition of a company for a product I did not feel was particularly well executed.”

I do also suffer from this sometimes. My ego gets in the way. But then I remember the reality: it’s not easy and that mostly everyone will have been through many, many challenges to become a success!

Sacrifice

“Startups demand sacrifice… Has it all been worth it? If you are expecting me to say “Yes, of course!” you would be wrong. The truth is, it hasn’t been worth it at all… yet.

Financially speaking, we are much worse off now than when I took the plunge. Of course the goal is for it to be worth it someday, but it is unclear how long it will ultimately take. In other aspects of my life, it may have been worth it so far, but it is hard to quantify those things.”

They’re about life. More specifically life experiences with people around you.. Don’t get me wrong money is vital. It’s the lubricant for our companies. But money is not the heart and soul of an organisation, a company. It’s in the people: co-founders, colleagues, friends (including your customers).

Startup Depression

“…The ultimate reality, though, is that we failed utterly at fundraising. We ended up wasting a lot of time. We had dozens and dozens of intros which led to about 40 or so meetings. After spending 3 months and hearing “No” 39 times we decided to just give up raising money. We looked around and felt like everyone around us was raising insane rounds with no problem. The net effect was that it killed our morale dead.”

After hearing, “UR DOING IT WRONG!” so many times, it’s hard to think that you’re doing anything right. At that point it’s very hard to soldier on. We had made a terrible mistake; we had given control to the investors, and they weren’t even giving us money!…

The lesson here is, if you are having trouble putting together a round in the first few weeks of actual investor meetings, just say, “screw it,” and get back to working ASAP.”

Every time I go into a conversation with an investor or investment adviser, all I hear is demand after demand.. This has happened right from the beginning of our startup. They want a solid product, more revenues, more customers, longer term contract, etc.. On and on it goes.

On the other hand you have customers. They are different. Yes, there are demands but they are willing to pay if you’re of value. Don’t get me wrong investors are vital but customers come first and I think Chad is getting that wrong way round.

Going Forward

“Which leads us to: so what now? Paul and I are not ready to quit. I personally don’t really know how to quit. When I make a commitment, there is very little that will stop me from following through, even in the face of adversity. I believe you have to adapt to play the cards you are dealt. We are willing to see this through to the bitter end if necessary. If this means changing course and trying something new, then sobeit, but while there is money in the bank we will continue on. We have some ideas and are investigating them further.”

For me knowing when to quit is the hardest question for any startup founder! Unfortunately startup founders often become obsessed by achievement at any cost. They become like sports people who over-train and leave little time for recovery. This leads to burn out or diminishing returns. A vicious circle of in frustration and bitterness is then formed. Sometimes you have to take a break to see the bigger picture or quit to succeed!!

My startup, Aware Monitoring, was recently invited to a local business club event as an example of a innovative and entrepreneurial company. At the event I was blown away by the growth and leading market positions of the other companies presenting!!

It occurred to me that ﻿﻿﻿﻿a strong local business and startup eco-system is absolutely vital to nurture young ‘underdog’ startup companies like ours. Success breeds success. We must all invest in our local eco-system and everyone in the city will reap the rewards.

My startup is based in the provincial city of Nottingham. Our city is the centre of business within our region. Nottingham is well known for its creativity, innovation and of course, Robin Hood. We have some big great companies here including Boots, Experian, Raleigh and Capital One. The city has a world leading biotech cluster and is a UK centre of gaming which hosts GameCity, an annual global videogames festival.

The city has a strong tech community, with social groups such as Nott Tuesday and Geekup bringing developers, designers, bloggers and online entrepreneurs together to share ideas. And we have some great tech companies including Esendex, Prime Principle and Outso.

However the City has a long way to go before becoming a leading cluster for web tech on the scale of BioCity, a Nottingham based biotech cluster. I’ve been extremely impressed by BioCity and the eco-system of companies and people working around it. Several of the companies at the event were based at BioCity. This type of light touch commercial eco-system with small and large niche companies working together seems to work incredibly well.

The ingredients which go to make a city of creativity that forms clusters such as BioCity, Silicon Valley or TechHub include:

Second generation founders - Industry specific founders who become investors and mentors in startups.

Universities – That attract and develop talent from across the nation who then settle locally.

Larger companies – Who’s staff leave the corporate world to branch out their own.

Institutional investors - These are needed to help continue to grow successful companies.

I was blown away and inspired by capability and growth of local companies presenting. This is both the companies that are part of BioCity and the ones who have done it own their own. These events show what can be done locally in a provincial city like Nottingham. The companies demonstrate the resourcefulness, commitment and innovation that founders are capabile of.

In some way its better to be a in city fighting to create something new. It brings people together to focus their efforts on creating something of meaning and value.

My next ‘Loving the Underdog’ post will be Loving the Underdog! PART3 – Why we Love ‘em

After three years, burning through a pile of cash and God knows how many work hours, here is my startup story from: (1) Finding an idea and sticking to it, (2) Getting a commercial product out the door (3) And then iterate/pivot to a product-market-fit (a must have product).

This video was recorded during a ‘Opportunity recognition’ lecture at Nottingham University and kindly filmed by my good friends at Skeleton Productions. These video’s are nicely divided into six easily digestible sections. If you only watch one, see PART3 – ‘Finding the perfect new business idea..’

PART 1 – About Nick Barker, Opportunity recognition and a quiz on famous tech startups that pivoted

PART 2 – Overview the three Opportunity recognition and development challenges. About Aware Monitoring

PART3 – Finding the perfect new business idea, lack of time and search for customer value proposition

I recently helped organise a startup competition in our City. There were five startups pitching. Several of them are attempting to take on much, much larger entrenched competitors. It seems like madness! They’re competitors are stronger, have more resources and many more customers. But, sooner or later, a startup has no choice. They have to fight the 800 pound gorilla!! Despite the odds, startups can and do beat their massive competitors.

You’ve gotta Love the startup underdog’s sheer audaciousness and courage against the odds!

If a startup is lucky enough to find a gap in the market, they will attract copy-cats. Initially most of them will be other startups. Mostly there’s little point in startups competing with startups, as they both have nothing to loose. Startups are quick to change, nimble and have a low-cost base. It’s almost best to ignore other startups playing in the same field.

With traction and time other copy-cats will be big powerful competitors. With customers and revenue streams, larger companies have the luxury of time. They have power. Startups don’t! If startups persistently compete against big players they will either be acquired or squeezed out of the market. Of course, if funded, the VC’s love the ‘acquire now’ option.

Find their weak points – Often large dominate market leaders become bloated with the fat of large profits. They have not explored new channels or markets. This is when a nimble startup can attack!

Go niche – Much large competitors can be avoided by going deep into a niche market where the play is too small for a large company.

Attack their profits - There is probably a product or service where the 800lb gorilla is making their fattest profits. Attack this treasure chest and weaken their position.

Forget them – It’s easy to get obsessed by the competition. Focus on the customers and their needs, not what the competitors are doing.

Out innovate them – This is making the most of their weak points. Re-define the market! It’s a challenge without significant resources i.e. major funding but it can be done. And when it is, the profit are huge. VC’s love this approach.

Startups have little choice but to stand and flight using their limited resources. The founders can’t just tuck tail and run when they they’re up against a large competitor. Startups can and do win against the 8o0lb gorilla’s. Just look at Mint v’s Intuit or Dyson v’s Hoover, the list goes on and on. This is the way of our evolutionary economics system. Startups change everything!!

Watching Morten Lund at Geek’n’Rolla it occurred to me that our entrepreneurial future lies in our past. This video is a must see – he’s a very excitable and wacky character. Morten exudes life and Zen. He said ‘I’m an entrepreneur’holic’. He can’t stop building businesses!

I’ve not been doing it myself for 18 years. Looking back into my career, family background, I’ve been building businesses up for about the same time. Of course, in my career this was for other people’s companies. However, I believe that we can still be entrepreneurial working for someone else.

Please bear with me as I use my past employments to demonstrate the point:

NetCare (part of ComputerLand UK Plc) – I took on the job of turning this fledgling IT managed service into something big. At the time I was offered a much more stable alternative position with a higher salary. It seems strange to take a more difficult position for less money but I saw the potential and wanted to build something of value.

Novell – I had always dreamt of working for a successful global software company and when Novell offered me the chance I was extremely excited. At the time Novell had suffered some serious set backs. When Eric Schmidt (now Charmian of Google) joined and the share price was on the up, I could see this could be a turnaround. It was the chance to help re-build Novell. Unfortunately I was proved wrong. Eric left and the company continued it’s slide downwards.

NetMan – This was a niche boutique consultancy. They specialised in Novell and Intel LANDesk. Only eight people were employed when I started. At the time I was offered a job at a much, much larger systems integrator but felt NetMan had more exciting potential. We did well. The business grow significantly and was acquired by ComputerLand UK Plc. We built something of value.

Business Systems Group (BSG) – We made this company into the fastest growing systems integrator in the UK at the time. I loved being a key part of that growth. I built up several product and service streams whilst at BSG. This included their software support business. At the time BSG had virtually no support services. They mainly sold PC hardware and software. I build their software support service into a healthy and profitable service. I also grow BSG’s Apple Mac business and helped build their software development services.

WARNING PLUG = Today, I have my own startup, Aware Monitoring – We have a website, web app, e-commerce performance monitoring service. If it’s down, with error or slow – we let you know! We started from scratch! Building it has been intense. What an amazing feeling doing it for yourself!! It’s such an incredible feeling when a major company and new customer says they’re ‘delighted’ with the service. Very different from doing it for someone else..

I love building businesses or product/service streams from very little. For me its the challenge of making something new that was not there before. I look back further into my family history and see a strong heritage of trading in great trading cities like York. Looking closer, my close family have had or still run their own businesses.

Having a startup and growing a business into something real is not for everyone. It’s not easy. It takes great persistence, sacrifice and belief. The more I think about it, the more I realise that building businesses has to be part of you. It’s part of your past and your future. I don’t think you wake up one day and say ‘I feel like starting a business today’. You have to be committed. Really committed – Like Morton! It has to be part of you!!

Its been a real eye opener starting-up a new company. We’ve been doing it now for over two years. After many life experiences I try to limit my expectations when going into something new. I believe having an open mind is the best way to enjoy a new experience. On our startup journey I’ve been surprised, and even shocked, by the sheer scale of the challenge and the help you do and don’t receive.

Startup experiences fall into to camps – the positive and the negative. This is typical of the roller coaster of a ride that a startup is. Lets get the negative out the way first:

Doubt – I still find it shocking how many people doubt your startup. Even when you’ve had some success they still doubt. The most shocking thing is the doubt can come from the closest people around you – family, friends, ex-coworkers, etc. To overcome this doubt I’ve relied on the positive people and startup friends.

Hard work – I’ve worked hard in my career. Startups take hard work to a new level. The shocking thing is there’s too much to do. You can’t possibly do it all. And do a good job at everything. The only answer is to prioritize and work damn hard!

Time – Everything takes much longer than you plan, want or need. In a bigger company, with a comfortable salary, you have much more time to make decisions and get things done. In a startup you have shockingly limited time and resources (money) to make something, sell it and survive.

Startup Karma – Other founders help you out expecting no return. Its surprise and shocks you when it happens. They’ve survived to tell their tale and know exactly how hard it really is e.g. point (1) & (2). They become your first customers or are customers who take you to the next level. It’s like an unwritten code – help other startups, when they really need it. The catch is, startup Karma can’t be forced. You can’t ask for it. It just happens.

Excitement – I’ve had a very exciting career having worked in London for several years, worked for a leading global software manufacturer and grown a outsource service internationally. Having a startup is an even more exciting experience. It’s all-consuming. It’s like being in a tornado – your pulled in every direction. It seems like chaos and changes often and could all come crashing down at any minute. Startups are certainly not for the fait-hearted!

I’ve heard this and repeated it before – startups are a roller-coaster of a ride. This is the biggest shock for me. One minute you feel like you can conquere the world when you win a key deal or a startup founder helps you out. The next minute someone close tells you to ‘get a real job’ or you miss a vital product deadline. You’ve got to learn to keep a level head and deal with the way it is. Thumbs up ;)

If you have an idea or a passion to do something – JFDI. Stop talking! Stop thinking!! Start doing – now!! NOW!! One of the easiest things to do in the world, is to procrastinate. A decision, even if proves to be a bad one, is still a direction. It can be learned from.

My thinking is, if these students really want to do something – they should do it now. They shouldn’t wait until they have even more excuses in life not to do it. One of my close family members urged me to start my own business when I was 19 years old but I said no. At the time it was the right decision. I did what was right for me and I was not being led by others.

In Bronnie Ware’s wonderful and touching post ‘Regrets of the Dying‘ she talks about people not fulling their dreams:

“1. I wish I’d had the courage to live a life true to myself, not the life others expected of me.

This was the most common regret of all. When people realise that their life is almost over and look back clearly on it, it is easy to see how many dreams have gone unfulfilled. Most people had not honoured even a half of their dreams and had to die knowing that it was due to choices they had made, or not made.

It is very important to try and honour at least some of your dreams along the way.”

If you really desire to have a startup or change something significant in your life, do it now. I take my hat to people like 23-year-old Joel Gascoigne, who gave a talk at our Nott Tuesday meetup group last week, for doing just this. He is now on his second startup project Buffer, a Twitter scheduling app. Joel is living his dream with passion, learning and persistence. He’s just getting on with it – JFDI!!

In a startup sales is the only thing that matters!! I like this statement:

“In the early-stage days, building top line revenues becomes a nonstop adventure for the CEO; no other marketing plan should be considered. In essence, sales begin with a sales force of one. It is up to the CEO to get on the road and to flush out discrepancies in the business and revenue models. No amount of marketing planning experts back at the desk can possibly conceive what the CEO will discover on the road…. It is the CEO who needs to go out in the field, press flesh, and be the one person responsible for driving like hell to get the numbers up. This task cannot be assigned, cannot be outsourced, and cannot be buried deep in elaborate marketing plans”. Robert W Price of the Global Entrepreneurship Institutein ‘What is a sale crusader? Do we need sales reps?’

Rejection – Sales involves lots of rejection. And of course most of us don’t like to be abruptly rejected, over and over again.

Expense – Selling is not cheap. It takes many events, connections and calls to start the sales process. Then a sale requires expensive meetings, which often have to be repeated.

Time – Sales take time. The average sale takes six communications before the sale is made. You have to patient and persistent.

Belief – Money drives salespeople. However in a startup there is no money. The founders have to rely on their faith and belief in their product/service.

Focus – Its much easier to work on a business plan, a marketing plan or develop some code. However there is no escaping the necessity for sales revenues (whether freemium or not!).

There is no choice in a startup, the founders have to be a the fore front of sales and all staff also have to sell. In a startup you are all selling for survival!! I’ll finish with a concluding quote from Robert W Price post: “Marketing Starts with a Crusader who can lead in the tough times, who can fight the odds and win. They are willing to lay their lives on the line”, Marketing High Technology: An Insider’s View, William H. Davidow

I hear this from entrepeneurs all the time: “I’m keeping my startup idea secret”. In my opinion and that of others, don’t! Talk about your idea to almost anyone who will listen. Everyone! Investors, entrepreneurs, friends, ex-coworkers, etc. In fact, anyone! Why? Because the more people you talk too, the more you will learn.

In Eric Karjaluoto classic post ‘Why your web startup will fail’, Eric says: ‘No one is looking at you. No one is listening to you. Even if you create a portable fountain-of-youth, your startup’s biggest challenge will be to get anyone to pay attention. Really–it’s that hard.’ You therefore have to talk to lots of people and there’s a ton of benefits when you listen to their responses:

Make better – By taking to people you will discover flaws and hopefully correct them.

Learn – You’ll understand a lot more about the sector and industry you’re aiming at.

Competitors – You will learn about competitive products that exist or are being built.

Find needs – You will gauge people’s excitement level for the product and for various features.

Practice – You’ll refine your all important sales and investor pitch.

Bad idea – You might even discover your idea is a bad idea and save yourself a world of pain.

Despite the clear benefits there’s always the counter argument: “but someone will steal my idea”. In reality there are, at most, a handful of people in the world who might actually drop everything and copy your idea. Unfortunately, most people will think your idea suck’s. However his does not mean your idea is stupid. Entrepreneurship is about seeing needs that other don’t always understand immediately. So, who’s going to copy you..?

The big company employee – They or their company will steal your idea. Not likely! Their employers normally have a product in the market and its hard to change direction, particularly for big companies. They are personally in a big company because its safe. Are they really going to leave their fat paycheck for the unknown.. I doubt it!

Other entrepreneurs – Most founders, who are going to build something, are already working on their project and are highly unlikely to drop everything to copy you. Even if they are in the idea generation phase, high integrity entrepreneurs are unlikely to copy your idea.

VC’s – They will either like your idea or not. If they like it and like you enough, you’ll get funded. VC’s prefer to fund an existing teams than taking an idea and building a team. The team owns it! The one risk is if they have entrepreneurs workingon a similar project. But most VCs will disclose this first and let you decide.

The handful of people in the world who might copy your idea are entrepreneurs just starting up with a very similar idea. Don’t worry competition is good and their will always be smart founders out there with similar ideas. Remember ideas are cheap and execution is everything. Also remember, an idea changes as it grows.

Finally, the conversation moves onto the NDA (Non-Disclosure Agreement) – “I’ll tell you if you sign an NDA”. Unfortunately this blows everything:

Shows inexperience – Few experienced entrepreneurs or VCs will sign them. Asking them to is widely considered a sign of inexperience.

Consequences - There value is not clear unless you are a big company. Are you really going to spend years suing someone who signed an NDA and broke it?

Time – As a startup you don’t have much time. Don’t waste it writing unnecessary documents.

Ideas grow and branch off in unexpected ways when they’re given the light of day. Don’t keep them secret to protect them. Talk to everyone who will listen and you’ll probably learn a thing or two ;)

I Love my home life (family, friends and adventure). I also love my startup. Like my children it embodies the future! With all this love to spread around, there’s not enough time for everything. I’m not alone in this startup vs home life situation. One of my good startup friends is in the extremely intense phase of finishing his app, Annot8, before launch. He’s working all hours!! His kids now think his office is ‘Daddy’s house’. From all I’ve read startup, home life, and physical/mental well-being needs to be carefully balanced to help make a successful startup.

The trouble starts, as it inevitably does, when a startups becomes an obsession. Driven from a desire to succeed and too much to do, a startup can take over your entire mind. Until you think and talk of little else. You become so connected to your startup your emotions are driven by the highs and lows of the company. Obsession is not all bad. It pushes and creates. However there is a personal price to pay:

Your body suffers – In Mark Suster’s ‘The Yo-Yo life of tech entrepreneurs’ post Mark talks about how your body suffers with weight gain. You more often eat unhealthy food and may consume more alcohol. You have less time for exercise. This isn’t good. We all know exercise is great for stress relief. I’ve certainly found it challenging to keep training whilst growing our startup. Be strict and make time for your body.

And you Mind suffers too – It seems to achieve great things one needs to leave the norm behind. ‘There is a fine line between entrepreneurship & insanity’ – Anita Roddick. To be great you have to concentrate on one thing. You can see this in any great sports person. However total concentration without any relief builds-up both physical and mental exhaustion. You ‘burn out’! The uncertainly of startups can also cause you to constantly worry. Here’s a interesting post on what a founders wife sees in her husbands start-up. Take a break from your startup and recharge your mental batteries.

When you become obsessed by your startup everything else suffers: your body, your personal relationships and ultimately your startup! The startup journey is a marathon. As founders we cannot do it on our own. We need a support mechanism. We must have help from family, friends and help ourselves. By isolating ourselves in our startup obsession we cut off the very support that can help us to succeed. Mike from crowdSPRING has some great tips on managing this difficult balancing act of life and startups.

I’ll leave you with one final thought from a great obsessive man: “If A is a success in life, then A equals x plus y plus z. Work is x; y is play; and z is keeping your mouth shut”. – Albert Einstein

About me

My name's Nick Barker. I'm the CEO and co-founder of a Tech startup - Aware Monitoring. My passions are the Tech industry, road biking and great big adventures. I'm a reflector and this is my personal blog. Find me on Twitter here and Click for more about me..